Forex trading strategy Battle of the Bands – is a straightforward indicator-based system for trading on the Forex market. Trading can be carried out on various currency pairs and uses only a few indicators. Since it operates on the hourly chart, several trades per month are opened for a single currency pair.
Market: Forex
Currency pairs: various
Indicators: simple moving average SMA, trend indicator Parabolic SAR, Fractals
Trading style: indicator-based
Timeframe: H1
Protective orders: StopLoss, Trailing Stop, breakeven
Placing the indicators on the price chart
1. Add two simple moving averages SMA to the price chart (period 32, applied to Low and High)
2. Add the Parabolic SAR Forex indicator (step 0.02, maximum 0.2)
3. Add two simple moving averages SMA (periods 100 and 200, applied to Open)
Trading signals of the Battle of the Bands strategy
To open a long position, wait for the following conditions to be met:
- The price is above the SMA (32) High moving average – above the moving average channel
- The price is above the SMA (100) and SMA (200) moving averages
- The closing price is above the opening price of the bar
- The Parabolic SAR Forex indicator moves below the price
A trading signal to open a short position appears when the following conditions are met:
- The price is below the SMA (32) Low moving average – below the moving average channel
- The price is below the SMA (100) and SMA (200) moving averages
- The closing price is below the opening price of the bar
- The Parabolic SAR Forex indicator jumps above the price
Protective orders and additional signals
1. A Doji candle or pin bar cancels the signal.
2. Place the protective StopLoss below the nearest fractal located below SMA (32) Low (for a buy trade) or above SMA (32) High (for a sell trade).
3. After the first bar closes in profit, close half of the position and move the protective StopLoss to breakeven.
4. Trail the protective StopLoss under each new Parabolic SAR point.
